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Brexit and references to the CJEU

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It was inevitable that the UK courts would start to encounter ‘Brexit based’ arguments. We now have an example of this in a tax context, following service of article 50 and the start of the two year countdown to the UK’s exit from the EU.
In Coal Staff Superannuation Scheme Trustees Ltd v HMRC [2017] UKUT 0137 (TCC) (reported in Tax Journal, 5 May 2017), the Upper Tribunal (UT) was asked to make an immediate referral to the CJEU, before the appeal on the substantive issues had been heard by the same tribunal. This request was made in order to protect the taxpayers from being deprived of their ability to seek the assistance of the CJEU in resolving their EU law based claim (here based on the free movement of capital) because of the UK’s decision to leave the EU. The taxpayer argued that, on the basis of the anticipated timing of the outcome of the substantive appeal, it was unlikely that a preliminary ruling could be sought and obtained from the CJEU before the expiry of the two year period envisaged in article 50. On this basis, the taxpayer’s position was that the UT should make a reference to the CJEU as, on a purposive reading of article 267 of the TFEU, it was obliged to do so as it was now ‘a tribunal of a member state against whose decision there is no judicial remedy under national law’.
This application appears to have been designated as a priority by the judiciary, and understandably so, as there is the clear ‘floodgates’ risk of numerous other similar applications being made if the UT accepted the application. This could lead to the CJEU being overwhelmed by the sheer number of references to respond to, which in turn could have wider ramifications – the EU 27 are unlikely to be impressed with UK cases clogging up the CJEU machinery for the next two years. Possibly with this in mind, the application was dealt with by Mrs Justice Rose, president of the Upper Tribunal Tax and Chancery Chamber.
The UT noted that it should not seek to preempt transitional provisions that will be required to bring an end to the jurisdiction of the CJEU in the UK, as envisaged by the UK government. The tribunal went on to reject arguments that the service of notice under article 50 should change the approach taken by UK courts in making references to the CJEU. Based on the specific facts in question, the UT held that it would be inappropriate to make a referral at this stage. The UT commented that, whilst the application of the EU law principles in question may be difficult, it should not seek a ruling from the CJEU unless it is really necessary (i.e. the tribunal needs to be satisfied that it would not be able to resolve the relevant issues with complete confidence); and it is not a given that such a reference would be made by the UT in these circumstances.
It is perhaps unsurprising that the UT rejected this application. The UT’s decision was possibly made easier by the position that there is an established body of CJEU case law on the EU law issues in question. It would be interesting to see if the same conclusion could be reached in a case which deals with an issue without the benefit of having been previously considered in detail by the CJEU; and/or on which UK tax practitioners are generally of the view that clarification from the CJEU is required. 
David Haworth, Freshfields Bruckhaus Deringer (
Issue: 1356
Categories: In brief